LAHORE - Ministry of Textile Industry (MoTI) has principally agreed to reduce tariffs on textile. Tariff rationalisation will be initiated from the next fiscal year (2012-13) that will bring down tariffs to 10 per cent in a phased manner, Profit learnt on Friday.
In a recent Tariff Reforms Committee meeting Planning Commission (PC) Deputy Chairman Nadeem ul Haque pointed out that textile was an export sector and it did not make sense to have a protection regime for it. MoTI agreed with the observation and showed willingness to reduce tariffs.
Tariff reduction
It was decided in the meeting that MoTI would prepare a plan for tariff reduction and submit its recommendation to the Economic Coordination Committee (ECC) of the Cabinet within two weeks. It was pointed out in the meeting that protection on textile was depriving domestic consumers and benefiting producers at their cost shifting consumer surplus to the producers. Addressing the meeting participants, MoTI Secretary expressed his dissatisfaction over the consultants’ report titled; ‘Pakistan Trade Policies: Future Directions’. He indicated that consultants ignored the Term of References (TORs) in their report and did not calculate Net Profit Ratio (NPRs) and Earnings Price Ratio (EPRs). The report also overlooked the tariff practices, he maintained.
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